September 16, 2017

Over The Counter Hearing Aids Are On The Way

Over The Counter Hearing Aids Are On The Way

Let's be honest. Hearing aids are expensive. In addition, they aren't covered by Medicare and are rarely covered by private health insurance plans. With a pair of hearing aids averaging over $4000 and some high-end models costing $6000-$7000, consumers have a right to be concerned about the high cost of these devices. That is why consumers and consumer advocates are excited about the latest developments in hearing regulation.


The Current Distribution Model

Currently, people who want help with their hearing have 3 viable options;

  1. Go see a local hearing aid dispenser or audiologist. While this likely leads to the most positive outcome, it can also be extremely expensive. In addition, hearing aids can be hard to shop locally, as most audiology clinics do not publish pricing and force you to come in for a hearing test to get pricing information. Different studies have placed the market penetration for hearing aids at around 25-30%, meaning that up to 80% of the people who need hearing aids choose not to get them. The high price of this model is likely a contributing factor.
  2. Go online and try to find hearing aids at a discount. There are many websites that act as middle-men to the traditional distribution model. They will often package the hearing aids with limited services and sell the hearing aids at a modest discount.
  3. Purchase a Personal Sound Amplifier (or PSAP). While these devices often look similar to regular hearing aids, they have fewer features and customization options are limited. In addition, they are not allowed to be marketed as a solution for hearing loss. This means that they can be sold as "amplifiers" or "sound enhancers" without claiming that they help treat diagnosed hearing loss. Because major manufacturers sell through hearing professionals, these products are not made by the major hearing manufacturers. This means that many of the latest audiological features are not included in PSAPs.

The new OTC Hearing Regulation

In August, the Senate approved the final version of the Over-the-Counter (OTC) Hearing Aid Act as part of the Food and Drig Administration Reauthorization Act. The bill was supported on both sides of the aisle, with Elizabeth Warren (D-Mass) and Chuck Grassley (R-Iowa) being the most prominent names on the bill. With a vote of 94-1, the billed passed the Senate and was ultimately signed by President Trump on August 18th.

The bill requires that the FDA create a new category of over-the-counter hearing aids for people with mild-to-moderate hearing loss. The FDA has been given 3 years to figure out the details before implementation, with a lot of folks suggesting this will take a minimum of 18 months from bill passage.

So what does this bill mean for Hearing Aid Consumers?

  1. More options - This bill means that hearing aid consumers will have more options. For those with mild-to-moderate hearing loss, there will most likely be cheaper products from which to choose. These new products (and the OTC delivery method) are unlikely to work well for the majority of the population. Those with complex or severe hearing losses with still need to see an audiologist for guidance and help with their hearing system
  2. More competition - Right now, the top 6 hearing aid manufacturers control about 90% of the market. With OTC coming, there will be new investment and interested parties entering the space. This should be a win for consumers, as they will see increased innovation in the space.
  3. Lower prices for most products - While the new OTC hearing devices are unlikely to service the majority of those with hearing loss, the creation of a new delivery model will put downward pricing pressure on the industry. This could mean lower wholesale and retail prices, which many Americans with hearing loss will appreciate.
  4. Major manufacturer participation in these cheaper hearing devices - Already, William Demant (Oticon's parent company) and GN Nord Store (ReSound's parent company) have signaled they will participate in the new category of hearing aids. Starkey Hearing Technologies has already partnered with Bragi, makers of the Bragi Dash hearable. They would seem like a lock to create something in this space, although nothing has been announced as of publication date. This is a positive, as the major manufacturers have largely not participated in the "sound amplifier" or "psap" category of devices. Having their technology and R&D in this segment should raise the game for cheaper products in general.

OTC Hearing Aids - in Conclusion

While the details are likely years away from taking shape, the passage of the bill is a positive step forward for current and future hearing aid users. Ultimately, the OTC Hearing Aid Act should increase innovation and decrease retail costs. For more information visit Consumer Reports or the Hearing Loss Association of America.